In Falling Markets, Payout Stocks Play Defense

As the S&P 500 has roared ahead, dividend stocks have lagged behind. A market reversal could change that.

Last week’s rout in the stock market looked like it might renew the appeal of a market group that has done poorly since the election: high-dividend-paying stocks. Since Jan. 1, according to Bespoke Investment Group, the 50 highest dividend payers in the Standard & Poor’s 500 index were down an average of 3.2%, compared with a 5.3% gain for the broader index.

That performance, as shown in the table of the index’s highest yielders and their returns this year, is seriously mixed: The slump in Frontier Communications...